New Hampshire Motor Transport Ass'n v. Rowe, No. CIV. 03-178BH.

Decision Date27 May 2005
Docket NumberNo. CIV. 03-178BH.
Citation377 F.Supp.2d 197
PartiesNEW HAMPSHIRE MOTOR TRANSPORT ASSOCIATION, et al., Plaintiffs v. G. Steven ROWE, in his Official Capacity as Attorney General for the State of Maine, Defendant.
CourtU.S. District Court — District of Maine

Michael A. Nelson, Jensen, Baird, Gardner & Henry, Portland, Lawrence R. Katzin, Paul T. Friedman, Ruth N. Borenstein, Morrison & Foerester LLP, San Francisco, CA, for New Hampshire Motor Transport Association, Massachusetts Motor Transportation Association, Inc., Vermont Truck and Bus Association, Inc., Plaintiffs.

Melissa Reynolds O'Dea, Paul D. Stern, Office of the Maine Attorney General, Augusta, ME, for G. Steven Rowe, in his official capacity as Attorney General for the State of Maine, Defendant.

DECISION AND ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT

HORNBY, District Judge.

The Interstate Commerce Clause gives Congress the authority "[t]o regulate commerce with foreign nations, and among the several States."1 Congress has exercised this constitutional power to enact legislation that limits state authority over the transportation of goods by air and motor carriers. Does this federal legislation preempt a Maine statute that regulates carriers when they deliver tobacco products in Maine? Maine lawmakers had two worthy objectives in enacting the state statute: to reduce Maine teenagers' access to tobacco products and to collect tobacco taxes.2 But worthy motives are not enough to avoid federal preemption, as other states learned when they tried to regulate consumer fraud or deceptive advertising in the airline industry.3 I denied a preliminary request to enjoin enforcement of the Maine statute.4 But now I conclude that two of the three challenged state provisions cannot survive the broad preemptive language of the federal legislation and two recent First Circuit decisions. If there is to be regulation in this area, it will have to come from the federal government.

I. PROCEDURAL BACKGROUND

New Hampshire Motor Transport Association, Massachusetts Motor Transportation Association and the Vermont Truck & Bus Association ("the associations") are non-profit trade associations. Their members include motor carriers and air/ground carriers in the cargo transportation business.5 The associations sued the Maine Attorney General, seeking a declaration that the Federal Aviation Administration Authorization Act of 1994 ("FAAAA"),6 preempts three provisions of Maine's law regulating the retail sale and delivery of tobacco ("the Maine Tobacco Delivery Law").7 They also ask that I permanently enjoin enforcement of these provisions.

I previously denied the associations' motion for summary judgment, and granted the Maine Attorney General's subsequent motion for partial summary judgment, rejecting the argument that the FAAAA facially preempts the Maine law.8 Both parties now move again for summary judgment. The associations continue to argue facial preemption, and also bring an as-applied challenge based upon the Maine law's effects on one of their members, United Parcel Service ("UPS").9 The Maine Attorney General argues that the FAAAA does not preempt the challenged provisions either facially or as applied.10

II. LEGAL BACKGROUND
(A) Federal Regulation of the Transportation Industry

Federal regulation of the transportation industry dates back to the Interstate Commerce Act of 1887, which created the Interstate Commerce Commission ("ICC") to regulate interstate railroad carriers.11 Congress sought national uniformity in the regulation of interstate rail transport. It therefore limited state authority over railroad carriers (and other industries later regulated by the ICC.)12

Congress placed motor carriers under ICC control with the Motor Carrier Act of 1935.13 The Motor Carrier Act authorized the ICC to regulate the entry, routes, business practices, rates and safety of motor carriers engaged in interstate or foreign commerce. A few years later, Congress created the Civil Aeronautics Authority, an agency similar to the ICC, to regulate air transportation.14 The Civil Aeronautics Authority governed entry, routes, rates business practices and safety of the airline industry. The Federal Aviation Act of 1958 recodified the Civil Aeronautics Act, continued the Civil Aeronautics Board (the reorganized form of the Civil Aeronautics Authority)15 and established and transferred authority over safety regulation to the Federal Aviation Agency (later renamed the Federal Aviation Administration).16

Since the 1970s, Congress has reversed course and deregulated the transportation industry.17 In the Airline Deregulation Act of 1978, Congress reduced federal regulation of the airline industry to encourage maximum reliance on free market competition.18 Congress also prevented the States from interfering with federal deregulation by including a broad preemption provision prohibiting states from "enact[ing] or enforc[ing] any law ... relating to rates, routes, or services of any air carrier."19

In the 1994 FAAAA, Congress extended the Airline Deregulation Act's preemption provision to prohibit state regulation of air/ground carriers as well. It also added a new provision preempting state regulation of motor carriers of property.20 In the same language used in the Airline Deregulation Act's preemption provision, the FAAAA preemption provisions broadly prohibit states from "enact[ing] or enforc[ing] a law, regulation, or other provision having the force and effect of law related to a price, route, or service" of a motor carrier, air carrier or air/ground carrier of property.

In enacting the FAAAA preemption provisions, Congress exercised its authority under the Interstate Commerce Clause to ease the burden intrastate regulation imposed on interstate commerce.21 Congress believed that the need for preemption of state authority arose out of a "patchwork of [state] regulation" of transportation, which created "a huge problem for national and regional carriers attempting to conduct a standard way of doing business." It believed that intrastate regulation also resulted in higher rates for intrastate shipments. Congress designed the preemption provisions to eliminate diverse state regulations ( such as regulation of entry, tariffs, prices and types of commodities carried), and promote uniform standards for air, air/ground and motor carriers engaged in the transportation of property.22

(B) Federal Contraband Cigarette Law

Although Congress has limited state regulation over the transportation of goods, Congress has also expressly recognized the power of the states to regulate and confiscate contraband cigarettes (cigarettes on which state taxes have not been paid). In 1978, Congress stated in the Contraband Cigarette Trafficking Act that federal regulation of contraband cigarettes does not "affect the concurrent jurisdiction of a State to enact and enforce cigarette tax laws, to provide for the confiscation of cigarettes and other property seized for violation of such laws, and to provide for penalties for the violation of such laws."23 Congress included this provision because "[t]he major responsibility for enforcing state cigarette tax laws is now and must continue to be the burden of the states."24

(C) Maine's Tobacco Delivery Law

The Maine Legislature enacted the Tobacco Delivery Law to "clarif[y] the collection of taxes with regard to the delivery sales of cigarettes" and "to strengthen the regulation of delivery sales of cigarettes, especially with regards to preventing sales to minors."25 When the Maine Legislature enacted the law in 2003, its Health and Human Services Committee considered testimony that nearly 25% of Maine's high school students smoke occasionally and 14% smoke on a regular basis.26 The bill's sponsor informed the Health and Human Services Committee that delivery sales via the internet increased minors' access to tobacco by giving them an opportunity to purchase tobacco without having to verify their age. He also stated that out-of-state retailers advertise and sell tobacco products tax-free, thereby increasing the tobacco delivery sales through the mail and the internet and costing the State lost tax revenue.27

The Tobacco Delivery Law is one of many steps that Maine has taken to restrict underage access to tobacco. When considering the Tobacco Delivery Law, the Legislature heard testimony about Maine's "comprehensive program on youth smoking," which "includes education on tobacco, increases in the price of cigarettes through [an] excise tax, ... programs to help youth who smoke and want to quit" and "tough laws regarding access."28 According to repeated testimony, this comprehensive approach contributed to a decline in smoking by Maine high school students.29

Increasing internet sales have frustrated the State's laudable and extensive efforts to restrict underage access to tobacco. The Maine Tobacco Delivery Law addresses this problem by requiring: that delivery services check for packages marked as containing tobacco and confirm that those packages are being sent by a Maine-licensed tobacco distributor or retailer; that tobacco retailers tell their delivery service (such as UPS or the other members of the carrier associations) the age of any tobacco-product purchaser; and that tobacco retailers use for tobacco-product delivery only a delivery service that agrees to request age identification from and deliver to the specific addressee.30

(D) Other States' Tobacco Delivery Laws

Other states recently have passed statutes regulating the delivery of tobacco products.31 Although these state tobacco delivery laws involve similar limitations on tobacco shipments, the specific requirements vary by state.

For example, while state limitations on tobacco shipments often depend on whether a retailer shipping or receiving the package is licensed, the licensing is state-specific. Thus, for each tobacco shipment, an interstate delivery...

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2 cases
  • New Hampshire Motor Transport Ass'n v. Rowe
    • United States
    • U.S. Court of Appeals — First Circuit
    • May 19, 2006
    ...court concluded that the challenged provisions of the Tobacco Delivery Law are preempted by the FAAAA. See N.H. Motor Transp. Ass'n v. Rowe, 377 F.Supp.2d 197, 210 (D.Me.2005) (citing United Parcel Serv., Inc. v. Flores-Galarza, 318 F.3d 323, 334-35 (1st Cir.2003) (UPS I)). The court determ......
  • Rowe v. New Hampshire Motor Transp. Ass'n
    • United States
    • U.S. Supreme Court
    • February 20, 2008
    ...“recipient-verification” provision (§ 1555–C(3)(C)) and the “deemed to know” provision (the second sentence of § 1555–D). See 377 F.Supp.2d 197, 220 (D.Me.2005). On appeal, the Court of Appeals for the First Circuit agreed that federal law pre-empted the two provisions. 448 F.3d 66, 82 (200......

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